The Rise of the Silver Economy

Growing population of older adults has businesses scrambling to address challenges, opportunities with aging in the 21st century

We’re not getting any younger. In fact, we are all getting older — living longer, working longer, and transforming the consumer landscape.

There are about 962 million people over the age of 60 in the world today — more than twice as many as there were in 1980. By 2050, that number will more than double again to nearly 2.1 billion. This rise in older adults along with declining birthrates means that by the middle of this century, there will be more people over age 60 than under age 15.

“The aging population is one of the most important trends in the world, and it’s a powerful force not just socially but economically,” says Bill Novelli, distinguished professor of the practice and founder of the Global Social Enterprise Initiative (GSEI) at the McDonough School of Business.

Novelli, co-chair of the national Coalition to Transform Advanced Care and former CEO of AARP, is one of a growing number of business leaders heading up the charge to better understand and serve the distinct needs of adults as they age. Older adults represent a massive opportunity for nearly every industry: consumers with new challenges that businesses can help solve. By addressing those challenges, companies can build a new market for their products and services while creating social value. They can boost their own bottom lines while improving quality of life for people as they age.

Estimates put the global value of this new market — dubbed the silver economy — at $15 trillion by 2020.

“This year, the oldest of the baby boomers turns 72, so you’ve got this rapid acceleration of a gigantic cohort moving into their older years,” Novelli says.

As a result, three major areas have emerged in which businesses have enormous potential to innovate: accommodating an older workforce, enabling people to stay in their own homes as they age, and serving the needs of family caregivers.

The AgingWell Hub, a key initiative of GSEI, brings businesses and organizations across industries together to collaborate on new ways to understand and solve the challenges aging consumers and their families face.

“It’s been a bit slow, but businesses are certainly awakening to these opportunities,” says Novelli.

People knew the aging demographic was coming, but what most didn’t recognize is that the 70-year-old boomer would be caring for a 93-year-old parent.”

— Liddy Manson, Director of the AgingWell Hub at Georgetown McDonough

Engaging the Aging Employee

The classic dream of retiring at age 65 and spending your golden years traveling and playing golf hasn’t aged well for many. “You have to put ‘retirement’ in quotes because nobody knows what it is anymore,” says Novelli.

In a 2017 Gallup poll, 74 percent of employed adults said they planned to work past retirement age, either out of financial need or because they’re simply not ready to walk away.

“Older employees can be incredibly valuable to companies,” says Melissa Gong Mitchell (MBA’09), executive director of the Global Coalition on Aging (GCOA), a research and advocacy organization that advises businesses on how to maximize the opportunities of an aging population.

Mitchell says older employees often are more loyal to their employers, they offer seasoned experience and institutional knowledge, and they can mentor younger employees. An older workforce also has different needs than younger employees. More important, Mitchell says employers would be wise to pay attention to these needs.

“Older people are the future of the workplace,” she says. “If, as an employer, you recognize and honor the changes that are happening in your employees’ lives, then you gain a competitive advantage among employers because people are going to be more loyal to you.”

By the middle of this century, there will be more people over age 60 than under age 15.

To help companies adapt along with the aging workforce, GCOA has developed a set of guiding principles for age-friendly businesses. The principles include discouraging age-related discrimination, designing ergonomic workplaces, and offering ongoing professional development, health and wellness programs, and financial planning to address longer life spans.

GCOA also points to a new demographic trend businesses can’t afford to ignore: the rising number of employees who juggle work responsibilities with caring for older family members. Every year, these employees cost U.S. businesses up to $34 billion in lost productivity.

Novelli, who co-authored the 2010 book Managing the Older Worker: How to Prepare for the New Organizational Order, says a big challenge for employers is building a collegial environment between younger and older employees.

“Imagine you’re a 70-year-old woman and you’re sitting across the table from your 32-year-old supervisor who looks like your daughter,” he says. “You’re saying, ‘How can I report to this kid?’ Meanwhile, the supervisor is looking at you wondering, ‘Is she trainable? Will she be able to modernize her work habits?’ The two of them have difficulty relating to each other because, unfortunately, ageism is still a prejudice in our society.”

Mitchell says combating that ageism is one way businesses can help not only older workers but also workers who will one day be older. In other words, everyone. She says businesses have an important role to play in nudging younger employees to plan and save for the lives they want for their older selves.

“Most millennials aren’t thinking about the fact that they’re going to live longer than their grandparents and can’t assume they’ll be able to retire at 62 — but they should be,” she says.

Upgrading the Comforts of Home

In a study conducted by Georgetown’s GSEI and Philips, a company with a focus on developing technology for the aging population, 91 percent of respondents (age 50–80) said they wanted to live in their own home rather than alternatives such as assisted living communities. The trend is known as aging in place.

“People want to live where they are as they age — where they’re most comfortable and feel independent,” says Novelli. “But most homes just aren’t designed that way.”

Even active, healthy older adults experience changes in mobility, dexterity, memory, and health care needs that the housing industry is starting to address with retrofitting design and smart technology. For example, lever-style door handles that work without the firm grasp a doorknob requires or smart stoves that automatically turn off if left on for too long.

The aging population is one of the most important trends in the world, and it’s a powerful force not just socially but economically.”

— Bill Novelli, Distinguished Professor of the Practice and Founder of the Global Social Enterprise Initiative

For adults with deteriorating health or chronic disease, the desire to stay at home and maintain independence gets more complicated. Beyond technology to make their homes safer and easier to live in, they need regular health monitoring and rapid communication with health care providers and family members. New innovations in sensors, the internet of things, and communications technology can help, but actually putting them to use can present its own challenge.

“There’s no shortage of technology development and creation, and there’s no shortage of seniors in need,” says Robert Wray (EML’10), a retired U.S. Navy rear admiral and founder of the in-home technology company BlueStar HonorCare. “The problem is connecting the innovation with the seniors who need it.”

Wray started his company to fill that gap. Based on a subscription model, BlueStar provides in-home technology products that fall into three categories: safety, health, and connection.

  • Safety includes products such as fall detection and fire detection sensors that automatically call for help.
  • Health includes monitoring devices that measure physical activity, heart rate, glucose levels and other factors, and alert health care professionals if an issue arises.
  • Connection includes mobile and tablet technology with automatic closed captioning or instant video chatting for communication with family members.

BlueStar doesn’t develop the technology. Instead, it identifies and sells technology suited for older populations.

“Most technology isn’t created for 80-year-olds, who have issues with things like hand-to-eye coordination, physical dexterity, and lack of moisture in their fingertips,” says Wray.

Often, it is an older adult’s son or daughter who seeks out technology so they can ensure their parent’s safety and communicate easily from afar.

“We provide devices that send them a text or an email if their parent’s blood pressure gets too high or too low, help their parents manage their medication, and make it easy for them to communicate,” Wray says.

Beyond physical health, Wray says technology can be game-changing in maintaining and improving emotional health for people as they age. “About a third of all seniors live alone, and half of women over 75 live alone,” he says. “Being connected to family, even in simple ways, can be huge. If you’ve ever seen an 80-year-old look into a tablet screen and see their newly born great-grandchild 1,000 miles away, you know exactly what I mean.”

Illustrations by Dan Bejar

Caring for Caregivers

As Wray points out, improving quality of life for an aging adult often requires going through a family member who has taken on the role of caregiver. These family caregivers — often aging baby boomers themselves — are stretched thin between work, caring for their own children, and finding solutions for their aging parents.

“If you don’t have the caregiver on board, it’s very difficult to effect change,” says Liddy Manson, director of the AgingWell Hub at Georgetown McDonough.

Initially a collaboration with Philips, the AgingWell Hub has grown into an incubator for cross-sector collaboration. The hub conducts research projects and holds events focused on the intersection of technology and aging. Recently, the AgingWell Hub released its first proprietary product: a detailed map of the caregiver’s journey, revealing the decision points — and pain points — caregivers deal with as they try to coordinate health care for family members with Alzheimer’s or other forms of dementia.

The journey map begins with some staggering facts: In 2016, 15.9 million family members and friends provided 18.2 billion hours of unpaid care to people with Alzheimer’s and other dementias, which adds up to $230 billion worth of care.

“People knew the aging demographic was coming, but what most didn’t recognize is that the 70-year-old boomer would be caring for a 93-year-old parent,” Manson says. “We’re unprepared as a society for the burden of caregiving.”

The journey map gives businesses and health care providers an opportunity to see the world from the caregiver’s perspective. Manson sees applications across health care, technology, financial services, and even retail.

“Major retailers are realizing that they’ve been marketing to women in their 40s and 50s as though they’re shopping for themselves, when it’s more likely they’re shopping for someone else,” Manson says. “How can major retailers help a caregiver who walks into a store looking for a new medical product for a parent? What kind of tools could they provide to help them feel empowered now and help them see what’s coming? They’re realizing they need to be having a completely different dialogue with these consumers.”

The AgingWell Hub also is leading a cross-sector group to explore issues related to housing and aging in place. “We want to pull people together to create a collective vision, not just of what living environments are going to look like but also of how people are going to make decisions and what needs to happen at different points along the way to help them,” says Manson.

There are about 962 million people over the age of 60 in the world today — more than twice as many as there were in 1980.

Estimates put the global value of this new market — dubbed the silver economy — at $15 trillion by 2020.

What it Means to Age

While much of the business activity around the aging population has been reactive, momentum is building for a forward-looking approach.

“It’s useful to think about these trends as not just about aging but about the future,” says Jim Barnett (C’86), director of strategic intelligence analysis at AARP. “For all of us, as we grow older, we’re thinking about the future. We know it’s going to be different,
so how can we shape the future we want? I think that’s really exciting.”

Barnett pays close attention to emerging trends that can inform how AARP fulfills its mission to advance people’s quality of life as they age. Founded in 1958, the organization has evolved along with its audience of adults 50 and over to look at issues beyond health care and retirement. These days, you’ll find AARP content about navigating the complexity of digital life, launching second or third careers, and managing family caregiving.

“We’re seeing a whole new life stage we just don’t have a name for yet,” says Barnett.

Some of the trends Barnett is paying close attention to include: maintaining control over digital identities as developments like electronic health records and the internet of things become bigger parts of our lives; how the gig economy can be an opportunity and a risk for older adults, providing flexible work without traditional benefits; how artificial intelligence is changing the nature of work; and how advances in personalized nutrition can impact health later in life.

Like Mitchell at the Global Coalition on Aging, Barnett says the issues facing older adults are clearly relevant for younger people too. Disarming the negative stereotypes surrounding aging can not only help people prepare for the reality of a longer life, but it can also help them get the most out of it.

“There’s a lot of research that says that people actually become happier as they get older,” says Barnett. “They live their lives, gain experience and wisdom, and know what they like and what they don’t like. They are able to make choices about what they want more easily because they have the benefit of having lived a full life.”

Source: Georgetown Business Magazine, Spring 2018

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